Our forex indices group individual FX pairs with the same base currency to make a forex 'basket'. The indices track the underlying prices of the currency pairs within that index. If the individual forex prices in that index increase, then the value of the index will go up. Conversely, if the individual FX prices decrease, then the value of that index will fall.

Trading forex indices as opposed to individual currencies can potentially be a more cost-effective and efficient way of trading, as it allows you to take a view on one area of the forex market, without having to open a position on each FX pair. It can be a good way to diversify your portfolio; for example, geopolitical issues could affect one currency pair in the index, while the others may remain unaffected. Forex indices can also be used to hedge any unfavourable moves in a particular currency and spread your risk, through exposure to a wider range of currencies rather than just one currency pair.

It's important to be aware that spread bets and CFDs are high-risk, speculative products. High volatility combined with leverage could lead to significant losses. As with any leveraged product, profits and losses are magnified as they are based on the full value of the position, not just your initial deposit on a trade. While you could profit if the market moves in your favour, you could also make a loss if the trade moves against you, particularly if you don't have adequate risk-management cover in place.